As the entertainment industry faces significant changes triggered by the global streaming TV boom, Hollywood's film and television writers are set to go on strike starting from Tuesday, causing turmoil in the industry.
The Writers Guild of America (WGA) called for the strike after failing to reach an agreement for higher pay from major studios such as Walt Disney Co and Netflix Inc. According to the WGA, the companies' behavior has created a gig economy within a union workforce, further devaluing the profession of writing.
While the Alliance of Motion Picture and Television Producers (AMPTP) has offered "generous increases in compensation," the WGA is still going ahead with the strike after receiving the authority from its 11,500 members to do so once their current contract expires. With conglomerates facing pressure from Wall Street to make their streaming services profitable after investing billions of dollars to attract subscribers, the entertainment industry is undergoing significant economic challenges.
The previous WGA strike in 2007 and 2008 lasted 100 days, costing the California economy an estimated $2.1 billion and resulting in productions shutting down, and out-of-work writers, actors, and producers reducing their spending. Although producers have indicated their willingness to increase offers of higher pay and residuals, they are unwilling to meet other proposals that the WGA is still insisting upon.
The AMPTP stated that the primary sticking points are proposals that would require a company to staff a show with a certain number of writers for a specified period, whether needed or not, and that they are willing to engage in discussions with the WGA to break this logjam.
The entertainment industry is facing multiple challenges, including declining television ad revenue, a shrinking TV audience, and the threat of a recession in the world's largest economy.
Additionally, writers are feeling the financial impact of the streaming TV boom, with shorter seasons and smaller residual payments. Consequently, the Writers Guild of America is seeking pay raises and changes to industry practices that result in them working more for less money.
According to Guild statistics, half of TV series writers currently work at minimum salary levels, up from one-third in the 2013-14 season, and median pay for higher-level writer/producers has decreased by 4% over the last decade.
One issue at the bargaining table is artificial intelligence, with the WGA seeking safeguards to prevent studios from using AI to generate new scripts from writers' previous work.
The writers also want assurances that they won't be asked to rewrite draft scripts created by AI.
Late Night Hit
In the event of a strike, late-night comedy shows like "The Tonight Show with Jimmy Fallon," "Last Week Tonight with John Oliver," and "Saturday Night Live" that rely on teams of writers to create timely content are expected to halt production immediately.
As a result, new episodes will not be available during their regular TV time slots or on streaming services the following day.
Daytime shows such as soap operas and "The View" will also likely face disruption, while news programs will continue unaffected as their writers belong to a different union.
If the strike lasts for an extended period, it could delay the fall TV season since writing for those shows usually begins in May or June. In such a scenario, networks may fill their programming with unscripted reality shows, news magazines, and reruns.
Netflix may be better insulated from immediate effects due to its global focus and access to production facilities outside the US. However, Hollywood is now in a new era of fiscal austerity with studios laying off thousands of employees and cutting spending on content.
With tight budgets, studios are keen to avoid any further disruptions after the COVID-19 pandemic halted production globally for months.
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